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-{{a|isda|}}{{dpn|/ˈfɔːwəd ˈkɒntrækt/ (also “[[forward sale]]”, “[[forward purchase]]” or just “[[forward]]”|n}}A over-the counter transaction under which one fellow agrees ''now'' to sell an [[asset]] to another at a pre-agreed price at some time ''in the future''. It is different from a [[Futures|future]], which is a standardised, [[exchange-traded]]  contract for the delivery of a certain asset at a pre-set date in the future. Forwards and futures have similar economic effects, and in limited cases are [[exchange-for-swap|exchangeable]],  but they not the same.
+{{a|isda|}}{{dpn|/ˈfɔːwəd ˈkɒntrækt/ (also “[[forward sale]]”, “[[forward purchase]]” or just “[[forward]]”|n}}A over-the counter transaction under which one fellow agrees ''now'' to sell an [[asset]] to another at a pre-agreed price at some time ''in the future''. It is different from a [[Futures|future]], which is a standardised, [[exchange-traded]]  contract for the delivery of a certain asset at a pre-set date in the future.
-====Economic features====
+Forwards have two main applications:
-Economically the main points of a forward sale agreement are:
+====Hedging====
+As a way of locking in today a price for an asset you will only need in the future.  It is a way of buying an asset without hacing to funds full purchase price before the point where you actually need the asset. You settle the payment and delivery at the time the contract matures.
-Hedging Risk: Forward contracts are often used to hedge against the risk of price fluctuations in the market1. For example, a producer of a commodity might enter into a forward contract to sell their goods at a fixed price, protecting them from potential price drops1.
+====Financing====
+Often used in [[financing]] arrangements such as [[repurchase agreement]]s, which comprise simultaneously executed spot sale and forward purchase — so I transfer title to this thing, against agreeing to take it back from you at an agreed price at a stated time in the future. In this case the “lender” avoids taking exposure to the market value of the asset, but is able to have and hold it as collateral  — together with margin — against the “borrower”’s ultimate repayment obligation.
-Speculation: Some market participants use forward contracts for speculation, betting on the future price movements of an asset1.
+===“Forwards” versus “futures”===
+Forward contracts are private, bilateral, [[over-the-counter]] contracts that may be customised to the parties’ hearts’ content. They can thus be contrasted with ''[[Futures|futures]]'' contracts, which are [[exchange-traded]], [[Central counterparty clearing house|centrally cleared]], standardised contract referencing the forward price of a commoditised asset, where there is no opportunity for customisation.
-Absence of Upfront Funding: In some cases, the seller (such as a developer in a real estate project) benefits from an absence of upfront funding of the project2.
+===Popular types of forward contract===
+*{{eqderivprov|Forward Transaction}} under the {{eqdefs}}
-Early Capital Call: On the other hand, the buyer may be required to call capital at an early stage without presenting rental revenues2.
+*{{euaprov|Forward Transaction}} under the {{euadefs}}
+{{sa}}
-Remember, while forward contracts can provide stability and predictability, they also come with their own risks, including the risk of default
+*Why [[Then I woke up and it was all a dream]] is not a great way of resolving settlement disruptions in a [[forward contract]]